Vietnam unveils draft for solar projects' new feed-in tariffs

Tariffs range from 6.59 to 9.85 cents/kWh, depending on the project’s location and technology.

The Ministry of Industry and Trade of Vietnam (MOIT) proposed new mechanisms for feed-in tariffs (FIT) to be used for two additional years (1 July 2019 to 30 June 2021) for grid-connected solar power projects as well as new tariff guidelines for the development of rooftop solar. Currently, the FIT of 9.35 cents/kWh is in effect only until 30 June 2019.

Baker McKenzie managing partner Frederick Burke said in a note that unlike the first format for FIT (one rate for all solar power projects), the decision proposes different levels of tariffs, classified by three irradiation regions of Vietnam and involving four different solar power technologies.

The proposed classifications for solar power projects are: floating solar power projects; ground-mounted solar power projects; solar power projects with an integrated storage system; and rooftop solar power projects.

Tariffs will vary from 6.59 cents/kWh to 9.85 cents/kWh. They will also vary between the first year (1 July 2019 to 30 June 2020) and the second year (1 July 2020 to 30 June 2021), with a gradual reduction of tariffs in the second year compared to the first.

Photo: Baker McKenzie

Provinces with lower solar irradiation and potential — mostly northern provinces — could get higher tariffs whilst those with higher solar irradiation and potential could get lower tariffs. “This indicates the government's policy to diversify solar investments in different regions of Vietnam,” Burke commented.

“However, this may have a significant impact on many ongoing solar power projects under development or construction in Vietnam given the fact that the majority of on-going projects are being developed in southern provinces and central highlands of Vietnam with high solar irradiation and potential,” he added.

The first draft of the Decision of the Prime Minister is set for application on 1 July 2019. Members of the private sector can recommend revisions and supplementations to the draft decision before 20 February 2019.